School Finance Passes During 89th Legislative Session, But Challenges Remain

School Finance Passes During 89th Legislative Session, But Challenges Remain

AUSTIN — Texas lawmakers ended the 89th Legislative Session by passing two sweeping education bills that together will reshape the future of both public and private schooling in the state. The session delivered on Governor Abbott’s long-standing priority: passing a school voucher program, but also sent much-needed funding to public school districts that have struggled under the weight of a stagnant basic allotment and rising operational costs.

Public Education Funding: What You Need To Know

While Senate Bill 2 includes the creation of a $1 billion school voucher program, House Bill 2 provides an estimated $8.5 billion in funding for Texas public schools. This outcome stands in stark contrast to the 2023 session, when the failure to pass a voucher proposal resulted in billions in school funding being withheld. 

With HB 2 now awaiting the governor’s signature, public school districts are expected to receive new funding for teacher and staff salaries, early education, special education, school safety, and general operations. Highlights include a $55 increase to the basic allotment - the first since 2019 - and a new "basic costs" allotment of $106 per enrolled student. Additionally, teacher compensation will rise by $2,500 for educators with 3-4 years of experience and by $5,000 for those with five or more years for a school district the size of Carroll ISD.

Carroll ISD is projected to net an estimated $1.25 million* after reconciling HB 2’s new revenue streams and required expenditures. District-specific impacts include:

• $400,000 from the basic allotment increase
• $2.42 million in teacher salary increases
• $330,000 for support staff compensation
• $800,000 from the basic costs allotment
• $300,000 in early education funding
• $200,000 for school safety
• Special Education and Teacher Incentive allotments: TBD

*These estimates are subject to change following TEA and other governing bodies' interpretation of this new legislation. Estimates listed above are revenue only; new expenditures incurred as a result of HB 2 are expected to total approximately $3.2 million.

While the bill will bring in some much-needed funds, leaders caution it won’t fully offset rising costs. With a nearly $5 million deficit projected for the upcoming year, Carroll ISD continues to evaluate both cost-saving and revenue-generating strategies proposed by the Budget Reduction Advisory Committee (BRAC). Plans include optimizing staffing with careful considerations to protect student programming and opportunities, reducing non-essential expenses, and exploring long-term revenue opportunities through facility rentals, land sales, sponsorships, and maximization of TIF funds.

SB 12

Another high-profile bill passed during the session was Senate Bill 12, widely known as the “Parental Rights” bill. Though there was discussion in the conference committee about reviving SB 686’s open enrollment requirement, that verbiage did not make it into the final bill. Instead, lawmakers inserted new annual reporting requirements for all districts. These reports will track facility usage and student capacity, potentially laying the groundwork for future legislation forcing districts to accept out-of-boundary transfers. The District will continue to monitor attempts at mandated open enrollment in future legislative sessions.

The Road Ahead for Carroll ISD

While HB 2 offers a meaningful step forward, it is not a long-term solution to continued budget challenges for Texas public schools. For Carroll ISD, the combination of increased operating costs, declining enrollment, and recapture obligations (estimated at $25 million for the ‘24-’25 school year), continues to strain the District's budget. Next year’s projected deficit has prompted a series of belt-tightening measures, including staffing adjustments, zero-based budgeting, and careful review of expenditures.

District leaders remain hopeful. With a five-year financial sustainability plan in progress and innovative ideas being vetted through the BRAC, Carroll ISD is ahead of the curve in planning. The challenge now is turning this renewed state investment into meaningful local impact - stretching limited dollars while continuing to advocate for long-term, sustainable funding. While this session’s increases are a positive step, they fall short of addressing the cumulative effects of years without a meaningful increase in public school funding, coupled with record inflation. Ongoing support from the state will be essential to ensure public schools not only recover, but thrive in the years ahead.

“We’re grateful for the progress made this session, but we know the real work continues,”  said Carroll ISD Superintendent Dr. Jeremy Glenn. “Our community deserves strong public schools, and we’ll keep fighting to protect the tradition of excellence our Dragons are known for."